265 Mo. 121 | Mo. | 1915
Lead Opinion
In June, 1910, the State of Missouri, u.pon the information of the Attorney-General, instituted a proceeding in quo warranto in the Supreme Court against the Hammond Packing Company, an Illinois corporation doing business under the authority of the laws of this State, at St. Joseph, Missouri, and the St. Louis Dressed Beef & Provision Company, a Missouri corporation engaged in business at the city of St. Louis.
On the same date a like proceeding was commenced in this court by the Attorney-General against the Armour Packing Company, a corporation organized unT der the laws of the State of New Jersey; Swift & Company, a corporation organized under the laws of the State of Illinois, and Morris & Company, a corporation organized under the laws of the State of Maine, each authorized to do business in this State.
The business of these corporations was the buying, slaughtering and marketing of live stock used for food, and in addition the dealing in cured meats, eggs, poultry, game, butter and other agricultural and dairy products, and the preparation and selling of the various by-products derived from the slaughtering of live stock.
The information in these cases was identical, barring names, dates and formal allegations particularly applicable to the corporations proceeded against, and each charged violations of the antitrust statutes of Missouri (Secs. 10298-10301, R. S. 1909).
Answers were filed in due time, and in January, 1911, an order was made referring the case against the Hammond Packing Company and the St. Louis Dressed Beef & Provision Company to the Hon. Daniel Dillon, as special commissioner, to hear and rule on the competency of all testimony offered, -and return same into this court with his findings of facts thereon. An abstract of the voluminous testimony agreed upon by the Attorney-General and respondents ’ counsel was
Although these proceedings were commenced separately, after the testimony had been taken before the commissioner in the suit against the Hammond Packing Company and the St. Louis Dressed Beef & Provision Company, counsel for these parties, as well as for the other corporations named, stipulated that the testimony thus taken, as well as the report of the commissioner, who was limited to a finding of facts, should be taken as the evidence in all of the cases, the stipulation being in these words: “It is hereby stipulated: That this case shall be submitted upon the evidence taken and the report of the commissioner made in case No. 16090, State ex rel. Attorney-General v. Hammond Packing Company et al., herein pending.”
The informations are substantially as follows:
That respondents have entered into a pool, trust and combination among themselves and with other corporations and persons to relator unknown, with the purpose and design to (1) regulate, fix and control prices to be paid for beef and beef products, etc., for sale and sold in this State; (2) to maintain such prices when so regulated and fixed; (3) to regulate, fix and limit the amount and quantity of beef and beef products sold and offered for sale in this State; (4) to control and limit the trade in beef and beef products, etc., in this State; and (5) to limit and lessen competition in the purchase and sale of beef and beef products in this State. That by reason of said trust and combination formed as aforesaid respondents have (1) regulated, fixed and limited the amount and quantity of such products sold and offered for sale; (2) that they have fixed and maintained the price of such products bought and sold in this State; (3) that they have lessened lawful trade and full and free competition in
The answer admitted the legality of the incorporation of respondents, their authority to do business in this State, and that as alleged in the informations they were at least until 1902 lawfully engaged in a competitive business with every other like concern in Missouri. Every other averment of the information was put in issue. The defenses presented by the answers were: (1) That the informations failed to state facts sufficient to constitute a cause of action; (2) That there was a misjoinder of parties defendant; (3) That the actions were barred by the Statute of Limitations; (4) That the statute creating the offenses charged had been repealed; (5) That the statute for the alleged violation of which forfeiture was sought was violative of the Federal Constitution; (6) That this court in an original proceeding has no jurisdiction to enforce the antitrust statutes. The commissioner being limited under the .order of his appointment to a finding of the facts did not consider the above defenses, as they presented only questions of law.
Before the commencement of these proceedings the Attorney-General under the provision of sections 10332-10338, Revised Statutes 1909, caused an inquiry to be made to ascertain whether informations should be filed against respondents. This inquiry was had before the same commissioner who subsequently took the entire testimony but who was then acting under the. appointment of this court solely for the purposes of the preliminary inquiry.
Much of the testimony taken before the commissioner in regard to matters antedating the formation of the National Company is irrelevant, and its consideration is not necessary to a determination of the issues involved. The record shows that whatever organization existed prior to the formation of the National Company was at its creation then terminated and the affairs of the preceding organizations closed up in July, 1902. To effectuate the organization of the National Company -fifteen million dollars was borrowed by representatives of Swift & Company, Armour & Company and Morris & Company, the contract in regard thereto being signed by J. Ogden Armour, G. E. Swift and Edward Morris, heads of Armour & Company, Swift & Company and Morris & Company respectively. The agreement between these parties uppn which was based the organization of the National Company provided that there should be formed a corporation with a bonded indebtedness and preferred and common stock, which should acquire the capital stock, plants, properties and business of Swift & Company, Armour & Company and Morris & Company, G. P. Swift, J. Ogden Armour. and Edward Morris each agreeing that he would have conveyed to the new company at least eighty per cent of the capital stock of the
Each party was to deposit one million dollars with a trust company to secure the performance of his part of the contract.
Any party thereto might purchase for the new corporation when formed, the capital stock and the properties and assets of other corporations engaged in the packing business upon the joint account of all of the parties, each of whom was to pay to the one making such purchase such proportion of all payments so made as the actual appraised value of the tangible property agreed to be conveyed by his company bore to the aggregate appraised valuation of all property of Armour & Company, Swift & Company and Morris & Company to be conveyed to the new corporation.
Pursuant to said contract purchases were made of the stock of the Omaha Packing Company, Hammond Packing Company, United Dressed Beef Company, Anglo-American Provision Company and its subsidiary companies, and the St. Louis Dressed Beef & Provision Company. These purchases were made at a cost of ten millions of dollars. J. 0. Armour, Gr. F. Swift and Edward Morris borrowed eight million dollars to pay on account of these purchases, securing same by the properties purchased for the proposed consolidation, held by trustees and afterwards conveyed to the National Company. The organized capital of the National Company was fifteen million dollars; the purpose of its organization as declared by its articles of association, was to engage generally in the packing business, but the evidence discloses that it has been operated only as a holding company and as a means of enabling Armour, Swift and Morris to meet to
The directors of the National Company are all parties interested in or connected with the Armour, Swift and Morris interests. After the organization of the National Company weekly meetings were held by the representatives of Swift, Morris and Armour, in Chicago, and have been continued since the organization of the National Company. The National Company maintained an auditing department with general traveling auditors who were sent out to audit the books of the various subsidiary corporations. These auditors reported regularly to the general auditor of the National Company. It also maintained various forces to look after the respective departments of the packing business, and reports were daily and weekly made by each subsidiary concern to the National Company in relation to all the business transacted by them. Daily reports were made of the amount of purchases of live stock, the prices paid therefor, the prices paid by Armour, Swift and Morris, and the prices they have paid, and also the amount of stock to be on the market during the day.
The National Company had head buyers who went on the market to aid the local buyers of the subsidiary concerns. Information was given each of such concerns as to the amount of purchases to be made by it and the prices at which these purchases should be made; the said concerns made their purchases of finished products through the National Company; they transmitted their wants and orders to it and it placed such orders with whichever company it saw fit. The National Company each clay advised them as to prices at which it could purchase for them, and in some in
A private wire connected all of the subsidiary corporations with the National Company, and daily information and reports relative to market conditions and the packing business were transmitted over this wire. The National Company charged no commissions on purchases made for the various corporations, but placed orders for each subsidiary corporation.
■ The profits and dividends declared by the National Company were derived from the dividends and profits of the subsidiary corporations, it having no other means of making profits. After the National Company received daily reports as to the purchases made and prices paid by each subsidiary corporation, this information was sent collectively to each of them to inform them what each of the other companies was purchasing and the prices being paid. The National Company also had a system of estimating costs which was substantially the same system adopted by Swift, Morris and Armour. This system and method was largely arbitrary and its basis was seldom changed. The selling price was determined by the estimated cost. The. testimony is to the effect that the actual cost was usually less than the estimated cost, and that in St. Louis and at other points the price at which meat was sold by subsidiary concerns of the National and by Armour, Swift and Morris, was substantially the same.
At the weekly meetings of the National Company statistical statements as to all of the subsidiary con cerns of the National, as well as those of Armour, Swift and Morris, were submitted. These statements disclosed the number of cattle purchased by each subsidiary company of the National Company, as well as the Armour, Swift and Morris companies, the volume of shipments made by each subsidiary corporation to the various parts of the United States, and the prices at which packing products had been sold, together with the
Upon the facts as above set forth the special commissioner found substantially as follows: That there was an agreement and understanding between Swift & Company, Armour & Company and Morris & Company and the National Packing Company and the respondents herein, and the other companies whose properties and assets had been transferred to the National Packing Company, as aforesaid, as to the conduct of their business made and entered into, with a view to lessen, restrict, limit and destroy free competition between said parties to said agreement in the purchase of cat-
Formal written exceptions to the report of the commissioner were filed, and these cases are for hearing thereon; they will be considered in the order of their presentation by respondents.
I. Respondents contend that the informations are insufficient in not specifically charging facts which show, if true, that respondents have violated the antitrust statutes. Before comparing or contrasting authorities pro and con on this subject, it is well, as was said by Mr. Webster on a memorable occasion, that we “glance
Although the sufficiency of an information in a q%w warranto proceeding of the particular class of these under review may generally be measured by the rules applicable to civil cases, as Brown, J., has clearly said in State ex rel. v. Railroad, 240 Mo. 35, our sun, if we may be permitted to continue the figure, in these cases is primarily the statute, which modifies the general rule in antitrust proceedings. It is as follows: “In any suit that is now pending, or which may hereafter be brought, in which it is charged that any pern son, corporation, partnership or association of persons has created, entered into, become a member of or participated in any pool, trust, ag’reement, combination, confederation or understanding in restraint of trade or competition with any other person, corporation, partnership or association of persons, it shall not be necessary to allege or plead the manner in which, or when or where such pool, trust, agreement, combination, confederation or understanding was made or effected.” [Sec. 10310, R. S. 1909.] This statute, the terms of which are unambiguous, simplifies the information, in dispensing with the necessity of specific allegations in regard to the manner in which, the time when and the place where the pool or trust was effected, and is applicable not only to cases where the offenses charged to have been committed are wrong in themselves, but also to those in which a misuser of a lawful right is charged. As to the distinction to be made in the pleadings in these two classes of cases, see State ex rel. v. Railroad, 240' Mo. 35, and especially the concurring opinion of Woodson, J., therein, l. c. 56, and State ex inf. v. Standard Oil Co., 218 Mo. l. c. 367.
An analysis of the information under review, the material allegations of which have heretofore been set
In the analysis of these informations to determine their sufficiency we have not overlooked the fact that they contain allegations unnecessary to a proper and precise averment of the offenses complained of; to illustrate : following the allegation that respondents were guilty of entering into and consummating the unlawful combination “among themselves and with each other” it is averred that like offenses were committed by them with “other corporations, partnerships and individuals engaged in the same business (whose names are to informant unknown).” Of this more at length later. It may he said generally, without hypercriticism, that the informations are inartificially drawn and do not as they should, in unnecessary verbiage, point directly and clearly to the material matters in issue; nevertheless, although obscured with words, they are sufficient to charge the respondents with the creation and consummation of a monopoly, or, in other words, a conspiracy in restraint of trade. This being true, the statements of unnecessary matter above set forth may he treated as surplusage. It was so ruled by this court in State ex inf. Hadley v. Railroad, 206 Mo. l. c. 46, which held unnecessary allegations in quo warranto proceedings to be surplusage. In passing, it may be pertinently said that the Hadley case, supra, in its further ruling in regard to this class of pleadings, announced that they were not governed by the general rules of civil procedure, a doctrine since clearly repudiated in State ex rel. v. Grimm, 220 Mo. 483, as noted by Brown, J., in State ex rel. v. Railroad, 240 Mo. l. c. 48. This is relevant only so far as it goes to show that the general rules governing the procedure in civil cases are applicable in quo warranto cases, and as a consequence that it was unnecessary to specify in the informations the other corporations or individuals which by reason of the unlawful combination came un
The general rule in civil cases is that if a pleading sets forth sufficient facts to constitute a cause of action, plaintiff’s right of redress is not prejudiced by the fact that unnecessary statements are added, but they may be disregarded. [Emmons v. Quade, 176 Mo. 22; Dunlap v. Kelly, 105 Mo. App. 1; Sumner v. Tuck, 10 Mo. App. 269; Van Raalte v. Epstein, 202 Mo. 173.]
In harmony with the rule announced in the Hadley case, supra, in regard to unnecessary allegations being regarded as surplusage, see also, Murray v. McGarigle, 69 Wis. l. c. 491; Swift & Co. v. U. S., 196 U. S. l. c. 395; State v. Thompson, 69 Conn. 720, and cases cited in 8 Cyc. 663, under note 9.
II. It is not necessary in these cases to enter into a discussion of the character and limitations of the power of the commissioner to take the testimony herein and report his findings . thereon. This has been done in State ex inf. v. Standard Oil Co., 194 Mo. l. c. 164, and the Lumber Company case, supra, and the correctness of the conclusions there reached is not questioned. We have, therefore, taken and considered the testimony in these cases as preserved in the joint abstract, as well as the commissioner’s findings thereon, regarding the latter as persuasive and to be accepted as correct where same, which we did not find to be the case, was not affirmatively wrong. Without repeating the testimony at length, the relevant parts of which we have set forth in.the statement with such succinctness as its prolixity will permit, it is disclosed that the National Company, organized as shown by its articles as a packing company, but utilized entirely as a holding company to direct, regulate and control other corporations, became after its organization the owner by purchase of the
A careful survey of the foregoing facts amply sustain the finding of the commissioner that the property and assets of respondents were transferred to the National Company to enable it to conduct, and that it did conduct, their business with, their approval and co-operation, which they were powerless to prevent after a sale of a majority of their stock, so as to lessen, restrict, limit and destroy free competition between said companies in the purchase of live stock for food and in the distribution and sale of fresh meats and packinghouse products, and that said transfers and agreements were made for the purpose of fixing- and maintaining the prices of live stock used for food and the prices of fresh meats and other packing- house products, and for the purpose of controlling and limiting- the quantity
This view of the fulness and force of the said testimony will, in the event of no prejudicial error being found in the proceedings, suffice to authorize an ouster under the statutes prohibiting unlawful combinations (Secs. 10298-10309, supra) and the. general statute (Sec. 2635, R. S. 1909) authorizing judgments in cases of this character.
In reaching this conclusion we have not been unmindful of the rulings of this court (State ex rel. v. Asso. Press, 159 Mo. 410, 467; State ex inf. v. Cont. Tobac. Co., 177 Mo. 1, 37) that offenses such as are here charged, savor of crime and the judgments sought thereon should be rendered only upon clear and convincing proof. In the review of this evidence we have, therefore, considered the intent and purpose of .the acts complained of, which if construed most liberally for the respondents, may not show an affirmative purpose to violate the law, but nevertheless the evidence is amply clear and convincing to show not only a specific intent to restrain legitimate competition in the articles and products involved and the consequent creation of a monopoly, but that by the creation of such a monopoly, trade was, in fact, unlawfully controlled and restrained. This conclusion is sustained by many authorities here and elsewhere construing the statute invoked as well as others of a similar character. [Nor. Secu. Co. v. U. S., 193 U. S. 197; State ex rel. v. Inter. Harv. Co., 237 Mo. l. c. 405; State ex inf. v. Armour
The force and effect of this testimony is not weakened by the fact that on their face the articles of incorporation of the National Company, the instrumentality through which respondents affected the unlawful combination and agreement, which prevented competition and restrained trade bore evidence of the organization of said company for legal purposes, if, as we hold it has been shown here, such organization grew out of and was a part of an unlawful conspiracy between respondents to control the output, price'and distribution of the articles and products in which they dealt and thus practically render impossible all legitimate competition (Finck v. Schneider Gr. Co., 187 Mo. l. c. 268). The general rule in regard to combinations of the character here, under review as announced in Swift & Co. v. United States, 196 U. S. 395, is not inappropriate, in this connection; that although the separate elements of a scheme may be lawful if found to be bound together by a common intent as parts of an unlawful scheme to effect a monopoly, the plan may make the parts unlawful. The liability of respondents for violations of the statutes in question, if committed in this State, as we hold them to have been, will not be affected by the fact that the instrumentality through which they operated in violating the law was a corporation which had been organized for ostensibly legitimate purposes in another State. [Euston v. Edgar, 207 Mo. 287.]
From all the foregoing we find that the combination of respondents under the direction and management of the National Company resulted in a common management, a community' of stock interests, an arbitrary fixing of the purchase and selling prices of live
III. The contention that these proceedings are barred by the Statute of Limitations might be entitled to serious consideration under the statute (Sec. 1914, R. S. 1909) which subjects actions brought by the State or for its benefit to a like bar to that applicable to actions between private parties; and as these proceedings are for penalties or forfeitures the three years’ Statute of Limitations (Sec. 1890, R. S. 1909) would apply were it not for the fact that the pleadings allege that at the time they were filed, and the testimony shows that, not only at the time' of the institution of these suits but thereafter respondents were members of and participated in the unlawful pool, trust and combination. The contention of the bar by limitations or from laches is, therefore, without merit.
IY. Respondents further contend that there is a misjoinder of parties defendant; that one corporation cannot be joined with others in a quo ivcirranto pro7 ceeding for an abuse or misuse of corporate rights, because such a charge has relation to the individual contract of each of such corporations with the State, and that there is no such joinder of rights or interests as to authorize one proceeding against all. As has been heretofore shown, informations in quo warranto are governed by the rules of pleadings in civil cases. The respondents .are charged not only with the same offenses, but such offenses are alleged to have been joined and to have
Y. If the contention of respondents as to the repeal of the statutes under which these proceedings were brought was seriously made, it has- . been abandoned in their brief and arguments. It will suffice to say that these-statutes were repealed and a new act was passed in-relation to the entire subject-matter of pools, trusts- and discriminations at the session of the Forty-seventh General Assembly (Laws 1913, pp. 549-555), but this act in no manner changed the burden.of the offenses necessary to authorize the proceedings herein, but simply made additions to the acts declared in the former statute to be necessary to constitute an unlawful combination in restraint of trade. Respondents
VI. A defense of former acquittal or prior adjudication of the matters here involved was urged by counsel for respondents in the oral argument,- but was in no manner pleaded or otherwise preserved for review. Therefore, whether the rule in criminal or civil procedure be applied, this question is not here for our consideration.
VII. The contention that the antitrust statutes are violative of the Constitution of the United States, urged by respondents in their answer, tat seemingly- abandoned in their briefs, is so completely foreclosed against respondents’ contention by the ruling of this court in State ex inf. v. Standard Oil Co., 218 Mo. l. c. 376, which was affirmed by the Supreme Court of the United States (224 U. S. l. c. 290), that time and space heed not be taken in discussing this question. The validity of these statutes under the Constitution of this State has also been settled. [Finck v. Schneider Gr. Co., 187 Mo. 244, 271.]
Finding no error in these proceedings,. a judgment of forfeiture of the franchises of the St. Louis Dressed Beef & Provision Company should be entered, dissolving and ousting it from all corporate rights under the laws of this State, and in addition that a fine of twenty-five thousand dollars be imposed against it; and it appearing that the other respondents, to-wit: the Hammond Packing Company, the Armour Packing Company, the Morris Company and Swift & Company are foreign corporations authorized to do business in this State, it is ordered, for the violations of the law aforesaid in their abuse and misuse of the authority conferred on them, that their licenses to do business in
St. Louis Dressed Beef & Provision Company, ouster and a fine of twenty-five thousand dollars;
Hammond Packing Company, revocation of license and a fine of twenty-five thousand dollars;
Armour Packing Company, revocation of license and a fine of twenty-five thousand dollars;
Morris & Company, revocation of license and a fine of twenty-five thousand dollars;
Swift & Company, revocation of license and a fine of twenty-five thousand dollars.
Upon the payment of the fines severally assessed against each of said corporations, within the time above limited, the forfeiture of the franchises of the St. Louis Dressed Beef & Provision Company, and the revocation of the licenses to do business in this State of the other corporations herein named as respondents, will be stayed pending the further order of this court, upon the conditions hereafter to be set forth by this court in its order and judgment in regard hereto. All of which is so ordered.
Concurrence Opinion
(concurring). — In my opinion the Legislature has the power and authority to control all the pleadings and procedure in this court the same as it has in the circuit courts, and it is wholly immaterial whether it pertains to proceedings in quo warranto, other original writs, or any other matters intrusted to the keeping of this court by the founders thereof.
The cases cited by Brother Bond ón page 1 O'- of his dissenting opinion (p. 168, post) do not, in my opinion, announce a contrary doctrine, and therefore, do not support the proposition that the Legislature has no such authority.
No such question was involved, considered or discussed in any of those cases, except by way of illustration, and that was against my learned brother’s contention.
The question there decided was whether or not the statutes mentioned in those cases applied to the pleadings and practice in the Supreme Court, and not that the Legislature had no authority to enact laws governing those matters, if in its wisdom it deemed it wise to so do.
In the discussion of this subject, Judge Napton, in the case of State ex rel. v. Stewart, 32 Mo. 379, l. c. 383, by way of obiter, expressly declares the law to be contrary to the doctrine announced by my learned associate, Judge Bond. The ruling of this court, as announced in that case by Judge Napton is expressed in the following language:
“There is no doubt that this court is mainly intended by the Constitution as an appellate tribunal. In some instances original jurisdiction has been given to it, but chiefly with a view to enable it to exercise more effectually its superintending control over inferior courts. Its power in proceedings in quo warranto seems to be a departure from the general policy
. This language clearly recognizes the power of the Legislature to control the pleadings and practice of this court in proceedings of this character, should it deem it wise to do so.
The Stewart case just mentioned was cited with approval by this court in the case of State ex rel. v. Job, 205 Mo. 1, l. c. 25, where the court, in speaking through Fox, P. J., said:
“It is insisted by learned counsel for appellants that the relators were entitled to judgment of ouster by reason of the failure of respondents to answer on October 3, 1903, and it is urged that no sufficient answer or return was made to this proceeding until Jan-
Prom these observations it is clearly to be seen that the cases cited do not support the doctrine that the Legislature is powerless to control the pleadings- and procedure in this court.
But upon principle, the mere fact that this court has authority to issue original writs, as I understand Judge Bond to contend, does not prohibit the Legislature from legislating upon and controlling those matters.
If that is true then by parity -of reasoning the Legislature has no authority over the pleadings and practice in the circuit courts, in that or any other re•gard, for their authority is also derived from the Constitution, sections 1 and 23 of Article 6.
“Section 1. The judicial power of the State, as to matters of law and equity except as in this Constitution otherwise provided, shall be vested in a Supreme Court, the St. Louis Court of Appeals, circuit courts, criminal courts, probate courts, county courts and municipal corporation courts. ’ ’
“Section 23. The circuit court shall exercise a superintending control over criminal courts, probate courts, county courts, municipal corporation courts, justices of the peace and all inferior tribunals in each county in their respective circuits.”
As previously stated, the cases cited by Judge Bond simply hold that the statutes there cited only applied to the circuit courts and not to the Supreme Court.
Now, if the Constitution contains no inhibition against the authority of the Legislature to control the pleadings and practice in the circuit courts, then how can it be logically contended, that it cannot control those matters in this court?
If there is any difference in that regard, the authority of the circuit courts is broader because the authority conferred upon those courts to issue such writs is granted in general terms, while that of this court and the various courts of appeals is granted in specific or limited terms.
So, in my opinion, the cases cited by Judge Bond, instead of holding that the Legislature has no power to prescribe the rules of pleading's and practice in this court, are, upon the other hand, authorities to the contrary; and upon principle, as I have tried to point out, the Legislature does possess that power and authority, for the reason that this and those courts stand upon the same bottom and possess exactly the same power and authority in issuing writs of quo voarrcmto and all other original writs.
It would be a most dangerous doctrine for this court to announce that the Legislature had no power to control the rules of pleading and practice herein.
While it is true, and it must be conceded, that the Legislature has no power to shear this court of its jurisdiction over the issuance and trial of such writs, yet there is nothing in the letter or spirit of the Constitution even remotely indicating that the Legislature may not, in its wisdom, control the pleading and proT cedure in this court in such matters.
With these observations in view I now return to the statutes in question. The most casual reading of them will show upon their faces that they apply to this court as well as to the circuit courts, and no sound reason can be advanced for holding they are not binding
II. The doctrine in the Williams case, 221 Mo. 227, is not sound, and was not followed by this Court in Banc in the case of State ex inf. v. Arkansas Lumber Co., 260. Mo. 212. The information in that case is in all respects substantially the same as is the information in this case; and also in that of the case of State ex inf. v. Standard Oil Co., 218 Mo. 1, where the same ruling was had.
In both of those cases it was held that where the information or petition for the writ charged that the conspiracy was formed for an illegal or unlawful purpose, then the facts constituting the conspiracy need not be stated, but upon the other hand, that where the conspiracy was formed for doing a lawful act in an unlawful manner, then the petition should state the facts constituting the conspiracy. This is elementary and is recognized by all of the courts on both sides of the Atlantic.
In the consideration of this question, this Court in Banc, speaking through Faris, J., in the case of State ex inf. v. Arkansas Lumber Co., 260 Mo. 212, l. c. 279, in clear and terse terms stated that rule in the following language:
“It is urg*ed by learned counsel for respondents that the above case is decisive of their, contentions upon this question in the instant case. Respondents, however, lose sight of the distinction which ought to be drawn under the law between the Missouri Pacific case, 240 Mo. 35, and the one at bar. In the Missouri Pacific case respondents were charged, in substance, with entering into an unlawful combination to do a lawful act; that is to say, an unlawful combination to fix a rate for carrying passengers not exceeding the statu
All pools, trusts and combinations mentioned in the statutes in question, in restraint of trade, etc., are unlawful, both at common law and under the statutes mentioned, and the rules of pleading prescribed in sections 10298 to 10301, Revised Statutes 1909, are in conformity with the common-law rule before stated, as has been held in this State in numerous cases.
III. Since reading the dissenting opinion, I have been convinced thereby that the penalties imposed by the majority opinion upon the respondents are excessive.
As I understand the policy of the State, it is not to unjustly or oppressively penalize the business interests of its citizens, but is to protect and encourage people to come into this State, establish and conduct legitimate business herein. Of course, that does not include business transacted in violation of the laws of the State of Missouri and good morals, whether transacted by citizens of this or any other State.
In the case at bar the record shows that prior to the filing the amended -information in this case, the respondents voluntarily dissolved the National Packing Company and ceased to transact business through that medium, which was the heart of the unlawful conspiracy complained of in this case and the means through which -that conspiracy was carried into execution. This shows that the respondents had in good
Since these facts appear from the record, and that such institutions are absolutely necessary for the well ■being of the State and citizens thereof, I can see no valid reason for placing the heavy fines mentioned upon them; and so believing, I am in favor of reducing the fines imposed by the majority opinion to at least one-half of the sums stated therein.
Since the foregoing paragraph III was written, and before the majority opinion was concurred in, the fine in each case of fifty thousand dollars was reduced to twenty-five thousand dollars against each defendant, in accordance with my suggestion. I therefore concur in the majority opinion.
I.
Concurrence in Part
(dissenting in part and concurring in part). — Being unable to agree to all the recitals of facts contained in the majority opinion or to its discussion of the law, I have prepared this statement of my views of both in this case.
The evidence shows that on May 31, 1902, a contract was made between Messrs. Armour, Swift -and Morris for the formation of a New Jersey corporation, with a capital stock of ninety • millions of dollars, to which should be conveyed the shares of stock of other corporations then owned or to be acquired by the parties. At the time of entering into this agreement the parties thereto owned or controlled large corporations bearing their respective names and engaged in the packing business. A forfeit of one million dollars was put up by each of them to secure the performance of this contract.
Upon the debacle of their scheme of mammoth consolidation the purchasers of these properties found themselves involved to the extent of their outlays and in possession of assets which could not be devoted to the purpose had in view when they were acquired. The matter was submitted to their counsel and it was determined to obtain a loan of fifteen millions of dollars-by putting up the properties so purchased and other securities as collateral, and to organize a holding and operating company with a capital stock of fifteen millions of dollars, the shares of which should be issued to the co-owners of the properties so purchased, in proportion to their respective interests. This was done by the issuance of the stock of that company into the following proportions, to-wit: Sixty thousand, one hundred and sixty shares to J.' 0. Armour; seventy thousand and forty-seven shares to G-. F. Swift; twenty thousand, seven hundred and eighty-three shares to Edward Morris, and one share each to qualify certain
Neither Armour, Swift nor Morris conveyed, to the National Packing Company any of the stock or assets of the large corporations hearing their respective names and which they had contracted to put into the “big merger” which had collapsed. Neither the joint abstract nor the report of the commissioner sustains the recital in the majority opinion, that eighty per cent or any.part of the assets of said corporations were conveyed to the National Packing Company. The capital stock and assets of the National Packing Company bore a very inconsiderable relation to the value of the outside properties owned or controlled by Messrs. Armour, Swift and Morris. The total meat and slaughtering business of the National Packing Company done in the year 1909 throughout the United States was seven per cent of the entire business of that kind done during that year. The total business done by the large corporations bearing the names of Armour, Swift and Morris for the same time was about twenty-nine per cent of the entire business carried on in the United States.
The commissioner appointed to take testimony in this case reported that the evidence did not show a monopoly of the meat and packing business if all of that which was done by the Armour, Swift and Morris concerns was added to that done by the National Packing Company.
The facts and the conclusions therefrom of the commissioner as to the formation of the National Packing Company are thus set out in his report:
“Gr. F. Swift, J. O'. Armour and Edward Morris were, respectively, large owners of the stock of their respective companies, each standing at the head of the management of his company. These three men in the summer of 1902 formed a plan to consolidate the
In addition, the commissioner reported that the Hammond Packing Company and the St. Louis Dressed Beef & Provision Company, who are the only defendants in the quo warranto filed by the Attorney-General, No. 16090, were engaged in business in this State, the former as an Illinois corporation under a State license and through a plant established at St. Joseph, Missouri, the latter under a Missouri charter and through a plant established at St. Louis, and had been so engaged since 1891. The second information filed by the same officer at the same time (June 20, 1910) was directed against three foreign corporations bearing the names of£ £ Armour Packing Company, ” £ £ Swift & Company,” and “Morris & Company,” and also licensed to do business in this State. That quo warranto is number 16089. As originally filed the information therein did not refer to the formation of the National Packing Company. The three defendants in the information were indicted and tried and acquitted in the Federal court at Chicago for an alleged violation of the Federal Antitrust Act. As to what took place at and after that trial the joint abstract shows, to-wit:
“W. E. Weber, called as a witness by the defendants, and being first duly sworn, testified as follows;
“On July 17, 1912, the National Packing Company sold and transferred all packing house properties and branch houses owned or controlled by it, and delivered same on that day, for a cash consideration. At the same time, there was likewise sold all of the property of the various companies, the stock of which was held by the National Packing Company. The properties so sold were actually delivered to the purchasers on that date, and since then the National Packing Company has been in actual liquidation, and had done no business whatsoever, except business incident to such liquidation. These sales and these dispositions of-its properties, as well as those of the companies the stock of which was owned by it, were made in good faith and for a valuable consideration. The property of the Hammond Packing Company, located at South St. Joseph, Missouri, was sold and delivered to the Armour interests, and the property of the St. Louis Dressed Beef & Provision Company, located at St. Louis, Missouri, was sold and delivered to the Swift interests. Since the sale and delivery of said properties to the Armour and Swift interests, respectively, the National Packing Company has had no interest whatsoever either directly or indirectly, in the operation of the business conducted on said properties, and the same has been owned, managed, controlled and directed solely by the Armour interests with respect to the Hammond Packing Company properties, and by the Swift interests with respect to the St. Louis Dressed Beef & Provision Company properties.
“I was a witness,,and in constant attendance, at the trial in the case of the United States v. Swift et al., tried at Chicago, Illinois, in- the United States District
“The testimony offered by the State here, is a portion of the transcript of the evidence in that case. ’ ’
About one year after these events, to-wit, on November 6, 1913, the succeeding Attorney-General filed amended quo warrantos against the Armour, Swift and Morris Companies, charging them with complicity in the organization of the National Packing Company and making the same allegations with reference to the violations of the antitrust laws of this State, which are contained in the quo warranto filed against the Hammond and St. Louis Dressed Beef & Provision Companies.
When this information was filed the testimony had been fully taken by the commissioner, who made a preliminary examination before the proceedings were begun, and who had been reappointed after the filing of the quo warranto.
The two causes were submitted on the same joint abstract, after oral arguments by counsel for both parties, upon the evidence taken in No. 16090', and upon the pleadings and report of the commissioner and exceptions thereto filed by the respective respondents.
II.
Upon the presentations of these pleadings the court reappointed the former commissioner to report the facts only, but gave him no power to report or pass upon any question of law. The whole question in this case turns on two propositions: Did the information charge any offense under the antitrust laws of this State? Second, was there any evidence to sustain the report of the commissioner that such laws had been violated?
Taking these in order:
In issuing a quo warranto upon the information given to it by the Attorney-General ex officio, this court acts in virtue of its original jurisdiction conferred' by the Constitution. The exercise of that jurisdiction cannot be controlled by the legislative body, nor can the pleadings in such actions be regulated by statute any further than this court permits or sees fit to adopt such regulation, as a reasonable rule for administering its jurisdiction as a court of the first instance. The Legislature cannot limit the original jurisdiction granted to this court, nor (what would be the same thing) limit the exercise of that jurisdiction. This has been repeatedly ruled in quo warranto when brought in this court by the Attorney-General ex officio as in the cases under submission. [State ex rel. v. Stewart, 32 Mo. 379; State ex inf. v. Beechner, 160 Mo. l. c. 86; State ex rel. v. Job, 205 Mo. l. c. 26; State ex rel. v. Vallins, 140 Mo. 523; State ex rel. v. Eby, 170 Mo. l. c. 527.]
It necessarily follows that the statute, Revised Statutes 1909, sec. 10310, quoted in the majority opin
The correct rule as to the allegations in quo warranto to forfeit a corporate charter is thus expressed: “In other words, whenever the information in quo warranto avers that the respondent has a corporate existence, and the evident purpose of the proceeding is to have its charter forfeited for nonuser, misuser, or usurpation of powers, then the pleader must plead specifically the acts of nonuser, the acts of misuser, or of usurpation relied upon for grounds of forfeiture, so that the corporation may know what it is called upon to meet and defend.” [State ex rel. v. Grimm, 220 Mo. l. c. 494.]
The above rule was to establish the necessary averments in a proceeding for quo wa/rrcmto brought in the circuit court. It was approved in express terms in a recent case in Banc where it was also ruled that an information filed here by the Attorney-General, charging respondents with making an agreement to “lessen and destroy competition” in the carriage of passengers and freight and to “fix and regulate rates” without specifying what rates had been agreed upon, or the time fixed for their continuance, was insufficient to state a misuse, abuse or perversion of the corporate powers of respondent. The court added: “The allegation by the Attorney-General that the agreement or combination entered into by respondents is an illegal usurpation and an abuse and perversion of corporate power, is merely a conclusion or presumption of law on
The conclusion above stated is clearly correct, and it is peculiarly pertinent in this case, in view of the •fact that the court quoted in its opinion in that case ■the statute (section 10310, supra) so strongly relied upon in the majority opinion, its attention not being called to the fact that the information in the case was one ex officio on the part of the Attorney-General in this court, and hence the statute in question was inapplicable.
Under the authority of these two cases in Banc the rule must be considered as settled in this State that an information of the character of the present states no cause of action if it alleges in effect merely a violation of sections 10298 to 10301 inclusive of the present revision without definitely and specifically stating the facts and circumstances showing guilt under those sections. Such general allegations when made in a pleading, contain no more of the elements of an offense under the antitrust statutes, than would be embodied in a general accusation of violating that statute. In other words, allegations of the information which simply quoted the statutory terms forbidding agreements to lessen competition, fix, regulate and maintain prices or to regulate quantity and amount of output, had no legal efficacy whatever in.stating any cause of action against the respondents charged with violating such section, or at least no greater potency in stating a cause of action than if the pleader had named the respondents
III.
The antitrust acts of Missouri were first enacted in 1889. Shortly thereafter a practical counterpart of them was enacted by the National Congress and known as the Sherman Act. Congress has not amended its first enactment. The Legislature of Missouri has amplified and broadened its antitrust law by successive amendments (1891, 1895, 1901, 1907), but without al
The court then found that the original Lead Trust, after assuming its corporate form, engaged in the same business in this State and elsewhere which it had carried on before that metamorphosis took place. Hence there was nothing in such change which could exempt its transaction in this State from the application thereto of our antitrust laws, and added: “Hence it must follow that if the stockholders and governing officers of the plaintiff corporation combined with each other to violate any of the provisions of the section under review through the instrumentality of their corporate entity, then the corporation composed by them was a party to such illegal combination within both the letter and the spirit of the above section of the Act of 1891. Or concretely stated, that a combination which is illegal under the antitrust law, cannot be operated under the cloak of a corporation by its constituent members of governing bodies.” Citing authorities. [National Lead Co. v. Grote Paint Co., 80 Mo. App. l. c. 267, 270.]
The doctrine of that case has been affirmed in this State in the exhaustive opinion in the Standard Oil case, 218 Mo. l. c. 452, and elsewhere. [To the same effect Standard Oil Co. v. United States, 221 U. S. l. c. 75, paragraphs A and B; United States v. Am. Tobacco Co., 221 U. S. l. c. 176.]
While it is true the corporation known as the National Packing Company was not- preceded by an illegal combination of the corporations whose property it took over, for the informations explicitly stated that prior to the formation of the National Packing Company all the corporations, including respondents, whose assets and stock it acquired, were legitimate competi
IY.
As to the sufficiency of the evidence to make a prima-faeie case against the two respondents, I also think the proof, though not positive nor direct, affords a basis clearly justifying the deductions of the commissioner that there was no competition in this State between the two respondents whose plants were respectively located at St. Louis and St. Joseph, nor between them and any of the agencies representing the three corporations mentioned in the second information, since the three persons who controlled these also owned the National Packing Company. But the evidence wholly fails to show any specific instances of the fixing or regulating of the prices of cattle products, meats and other commodities dealt in by the respond
“Sec. 10299. Pool and Trust Agreements Defined. Any person who shall create, enter into, become a member of or participate in any pool, trust, agreement, combination, confederation or understanding with any other person or persons to regulate, control or fix the price of any article of manufacture, mechanism, merchandise, commodity, convenience or repair, or any product of mining, or any article or thing whatsoever, of any class or kind bought and sold, or the price or premium to be paid for insuring property against loss or damage by fire, lightning or storm, or to maintain said price when so regulated or fixed, or shall enter into, become a member of or participate in any pool, trust, agreement, contract, combination, confederation or understanding, to fix or limit the amount or quantity of any article of manufacture, mechanism, merchandise, commodity, convenience, repair, any product of mining, or any article or thing whatsoever of any class or kind bought and sold, or the price or premium to be paid for insuring property against loss or damage by fire, lightning or storm, shall be deemed and adjudged guilty of a conspiracy in restraint of trade, shall be punished as provided for in this article. [Laws 1907, p. 377.]”
These statutes must be given a reasonable interpretation. This method of construing such statutes was established in a great judgment recently delivered, when the Supreme Court of the United States held that similar Federal statutes must be interpreted by the exercise of reason. That decision, when made, met a downpour of rant and was assailed by blasts of flatulent criticism, but, being founded on the rock of reason■, it withstood both the rain and wind of verbosity, and emerged from the storm, in the serene light of correct thinking, as an enduring canon of legal science.
The judgment of the Chief Justice of the.United States in these cases has been quoted and adopted by the Supreme Court of Missouri in the recent case in Banc. [State ex inf. v. International Harvester Co., 237 Mo. l. c. 392.]
Neither was there any evidence in the record that a producer or consumer or a competitive dealer, was injured by the unification of ownership created in the formation of the National Packing Company. The bare fact that a single ownership was in contravention of the letter of a section of the antitrust laws, is all that can be deduced from the evidence in this case. These facts in my opinion are determinative of the proper judgment to be rendered herein.
In considering that question, attention must be given to the further fact that this holding company was voluntarily dissolved and its property sold to purchasers for cash before the second information was filed and about two years before the submission of the case. It is therefore apparent that the law will be fully vindicated and the antitrust act wholesomely administered by ordering ouster of the charter of the one and revocation of the licenses of the others. Such orders to be suspended upon a showing by respondents that their present business operations are not con
This in substance has been our method of dealing with other cases when the respondents, though acting theretofore in violation of the law, have after judgment made such amends. Here the law has been seemingly complied with before judgment and after an acquittal of the officers of the corporation under an indictment for forming such corporation.
When the • respondents dissolved the National Packing Company in advance of the decision of this case, they gave up the only thing upon whose existence any infraction of the laws of this State was predicable in the averments of the information. Necessarily therefore when the National Packing Company ceased, .the non-competitive methods of respondents under that agency also ceased.
The informations admit that prior to the National Packing Company all of the respondents were “legitimate competitors.” Seemingly, therefore, that status has been now regained. At least, there is nothing in this record that shows to the contrary. This record is a transcript of the one made on the trial of the three individuals who incorporated the National Packing Company for violation of' the Federal antitrust law. They were acquitted in that proceeding.
The national and State idea on this subject is to foster the growth and expansion of business by normal and fair methods and through honest instrumentalities. It was not designed to check the development of industrialism in any of its forms or departments. Its only object is to prevent by the national and State law on this subject injury to the producer, or to the con
